IATA has announced that the Passenger Agency Conference (PAConf), composed of IATA's member airlines, adopted Resolutions for the full implementation of the New Generation of IATA Settlement Systems (NewGen ISS) initiative.

According to IATA, NewGen ISS represents the most extensive and ambitious modernization of the IATA Billing and Settlement Plan (BSP) since it was created in 1971 to facilitate the global distribution and settlement of funds between travel agents and airlines.

The BSP operates in some 180 countries and territories, not including the U.S., to facilitate and simplify the selling, reporting and remitting procedures of IATA Accredited Passenger Sales Agents, as well as to improve financial control and cash flow for its approximately 400 participating airlines. Last year, the BSP processed $219bn in airline funds with 100% on-time settlement.

Last year, the PAConf approved the development and introduction of three pillars of NewGen ISS comprising:

• Three levels of travel agent accreditation, offering greater flexibility. Travel agents will be able to choose the model most applicable to their business, as well as to convert across models as their business evolves.

• IATA EasyPay - a voluntary pay-as-you-go e-wallet solution for issuance of airline tickets in the BSP that offers a lower cost per transaction. As a secure form of payment, IATA EasyPay transactions are not part of a travel agent's cash sales at risk. This allows travel agents a means to lower their financial security amounts held with IATA, and to issue transactions which are not included in their BSP remittance capacity.

• Global Default Insurance – an optional financial security alternative for travel agents that presents a cost effective and flexible alternative to bank guarantees and other types of security.

To these three pillars is now added a fourth. The Remittance Holding Capacity (RHC) is a risk management framework to enable safer selling and mitigate losses resulting from travel agency defaults. For the majority of travel agents, the RHC will be calculated based on the average of the three highest reporting periods of the previous 12 months plus 100%.

Additionally, the Resolution text incorporates provisions related to Transparency in Payments (TIP), a new industry initiative. TIP reveals the different features and costs associated with each form of payment and agent remittance of airline funds. As it stands today, airlines only see the settlement costs after the fact, if at all. No form of remittance is barred by TIP, but travel agents can only use those forms to which an airline has previously given consent. Importantly, TIP allows travel agents to use their own credit cards — previously not supported in the BSP — if an airline consents.